SHANGHAI, China, Aug. 10 /Xinhua-PRNewswire-FirstCall/ -- 51job, Inc. (Nasdaq: JOBS), a leading provider of integrated human resource services in China, announced today unaudited financial results for the second quarter of 2007 ended June 30, 2007.
Second Quarter 2007 Financial Highlights:
-- Total revenues increased 21.1% over Q2 2006 to RMB209.9 million
(US$27.6 million), at the top end of the Company's guidance range of
RMB200 to RMB210 million
-- Gross margin improved to 57.8% compared with 56.0% in Q2 2006
-- Operating income grew 46.4% over Q2 2006 to RMB43.1 million (US$5.7
million)
-- Net income increased 19.5% over Q2 2006 to RMB31.0 million (US$4.1
million)
-- Fully diluted earnings per common share were RMB0.55 (US$0.14 per ADS)
-- Excluding share-based compensation expense and foreign currency
translation loss, non-GAAP adjusted fully diluted earnings per common
share were RMB0.74 (US$0.20 per ADS), in line with the Company's
guidance range of RMB0.67 to RMB0.77
Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, Inc., said, "Our solid second quarter performance was highlighted by continued traction in new customer acquisitions and strong growth in advertisement volumes. We also saw meaningful margin improvement during the quarter, achieving a record gross margin level and higher operating margin despite increased spending on sales and marketing activities."
"We are pleased with our progress this year and will continue to invest in new product development and to execute an aggressive sales and marketing strategy. We believe these initiatives will strengthen our competitive position, drive revenue growth and enable us to generate greater returns to shareholders in the longer term," said Mr. Yan.
Second Quarter 2007 Unaudited Financial Results
Total revenues for the second quarter ended June 30, 2007 were RMB209.9 million (US$27.6 million), an increase of 21.1% from RMB173.4 million for the same quarter in 2006.
Print advertising revenues for the second quarter of 2007 increased 10.8% to RMB107.6 million (US$14.1 million) compared with RMB97.1 million for the same quarter in 2006. The increase was primarily the result of a greater volume of advertisements in 51job Weekly which was partially offset by lower average revenue per page. The estimated number of print advertising pages generated in the second quarter of 2007 grew 37.3% to 4,213 compared with 3,068 pages in the same quarter in 2006. Average revenue per page in the second quarter of 2007 decreased 19.3% over the same quarter in 2006 due to growing revenue contribution from lower priced cities.
Online recruitment services revenues for the second quarter of 2007 were RMB71.2 million (US$9.4 million), representing a 29.3% growth from RMB55.1 million for the same quarter last year. The increase was mainly attributable to growth in the number of employers using the Company's online services. Unique employers using the Company's online recruitment services increased 32.1% to 57,975 in the second quarter of 2007 compared with 43,891 in the same quarter last year.
Executive search revenues for the second quarter of 2007 increased 2.8% to RMB4.7 million (US$0.6 million) from RMB4.6 million for the same quarter last year. For the second quarter of 2007, other human resource related revenues grew 58.7% to RMB26.5 million (US$3.5 million) from RMB16.7 million in the second quarter last year principally due to greater customer demand for corporate training and business process outsourcing services.
Gross profit for the second quarter of 2007 was RMB115.1 million (US$15.1 million), representing an increase of 25.4% from RMB91.8 million for the same quarter last year. Gross margin, which is equal to gross profit divided by net revenues, was 57.8% in the second quarter of 2007 compared with 56.0% in the same quarter in 2006.
Operating expenses for the second quarter of 2007 were RMB72.0 million (US$9.5 million) compared with RMB62.4 million for the same quarter last year. Operating expenses as a percentage of net revenues decreased to 36.2% for the second quarter of 2007 from 38.1% for the second quarter of 2006. Excluding share-based compensation expense, operating expenses as a percentage of net revenues decreased to 33.3% in the second quarter of 2007 compared with 34.0% in the second quarter of 2006.
Sales and marketing expenses for the second quarter of 2007 increased 34.5% to RMB42.2 million (US$5.5 million) from RMB31.4 million for the same quarter in 2006 primarily due to higher employee salary and benefit expenses due to the hiring of additional salespersons, greater advertising expenses, and increased spending on marketing and promotional activities.
General and administrative expenses for the second quarter of 2007 decreased to RMB29.8 million (US$3.9 million) from RMB31.0 million in the second quarter last year primarily due to lower office rental and share-based compensation expenses, which were partially offset by increased costs relating to new staff additions and higher employee salaries.
Income from operations for the second quarter of 2007 increased 46.4% to RMB43.1 million (US$5.7 million) from RMB29.4 million for the same quarter last year. The Company's effective tax rate increased to 31.2% in the second quarter of 2007 compared with 21.9% in the second quarter of 2006 due to the expiration of certain tax exemptions.
Net income for the second quarter of 2007 increased 19.5% to RMB31.0 million (US$4.1 million) from RMB26.0 million for the same quarter in 2006. Fully diluted earnings per common share for the second quarter of 2007 were RMB0.55 (US$0.07) compared with RMB0.46 for the same quarter in 2006. Fully diluted earnings per ADS for the second quarter of 2007 were RMB1.10 (US$0.14) compared with RMB0.92 in the second quarter of 2006.
In the second quarter of 2007, the Company recognized total share-based compensation expense of RMB6.8 million (US$0.9 million) compared with RMB8.0 million in the second quarter of 2006. The Company also recognized a foreign currency translation loss of RMB4.3 million (US$0.6 million) in the second quarter of 2007 compared with a translation loss of RMB1.3 million in the second quarter of 2006 resulting from an appreciation of the Renminbi against the U.S. dollar.
Excluding share-based compensation expense and foreign currency translation loss which had no impact on the Company's cash earnings, non-GAAP adjusted income for the second quarter of 2007 was RMB42.1 million (US$5.5 million), a 19.6% increase from RMB35.2 million for the second quarter of 2006. Non-GAAP adjusted fully diluted earnings per common share were RMB0.74 (US$0.10) in the second quarter of 2007 compared with RMB0.62 in the second quarter of 2006. Non-GAAP adjusted fully diluted earnings per ADS in the second quarter of 2007 were RMB1.49 (US$0.20) compared with RMB1.25 in the second quarter of 2006.
Six Months 2007 Unaudited Financial Results
Total revenues for the six months ended June 30, 2007 were RMB410.4 million (US$53.9 million), an increase of 18.7% from RMB345.9 million in the comparable period in 2006. Income from operations for the six months ended June 30, 2007 increased 33.9% to RMB84.9 million (US$11.2 million) from RMB63.4 million for the same period last year.
Net income for the first half of 2007 increased 20.4% to RMB63.2 million (US$8.3 million) compared with RMB52.5 million for the same period in 2006. Fully diluted earnings per common share for the first half of 2007 increased to RMB1.12 (US$0.15) from RMB0.93 in the comparable period in 2006. Fully diluted earnings per ADS for the first half of 2006 were RMB2.23 (US$0.29) compared with RMB1.86 in the same period in 2006.
Excluding share-based compensation and foreign currency translation loss, non-GAAP adjusted net income for the six months ended June 30, 2007 increased 21.9% to RMB84.4 million (US$11.1 million) from RMB69.2 million for the six months ended June 30, 2006. Non-GAAP adjusted fully diluted earnings per common share were RMB1.49 (US$0.20) in first half of 2007 compared with RMB1.23 in the same period in 2006. Non-GAAP adjusted fully diluted earnings per ADS in the first half of 2007 were RMB2.98 (US$0.39) compared with RMB2.46 in the same period in 2006.
As of June 30, 2007, the Company's cash balance was RMB959.2 million (US$126.0 million) compared with RMB868.7 million at December 31, 2006 and RMB919.2 million at March 31, 2007.
Business Outlook
For the third quarter of 2007, based on current market and operating conditions, the Company's revenue target is in the estimated range of RMB205 to RMB215 million (US$26.9 to US$28.2 million). Excluding share-based compensation expense and any foreign currency translation losses or gains that may arise from further Renminbi revaluations, the Company's non-GAAP fully diluted earnings target for the third quarter of 2007 is in the estimated range of RMB0.55 to RMB0.65 per common share (US$0.14 to US$0.17 per ADS). The Company expects aggregate share-based compensation expense in the third quarter of 2007 to be approximately RMB8 million.
Currency Convenience Translation
For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollars at the rate of RMB7.6120 to US$1.00, the noon buying rate in the City of New York for cable transfers of Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York, as of June 29, 2007.
Conference Call Information
Management of 51job will host a conference call at 9:00 p.m. Eastern Time on August 9, 2007 (9:00 a.m. Shanghai / Hong Kong time zone on August 10, 2007) to discuss second quarter 2007 results. The call will be available live and on replay through 51job's investor relations website, http://ir.51job.com . Please go to the website at least fifteen minutes early to register and download and install any necessary audio software. Participants may also dial into the teleconference at +1-800-475-3716 (+1-719-457-2728 for international callers) and provide the passcode 5607475. An audio replay of the conference call will be available three hours after completion through August 16, 2007, by dialing +1-888-203-1112 (+1-719-457-0820 for international callers) and entering the passcode 5607475.
About 51job
51job, Inc. (Nasdaq: JOBS) is a leading provider of integrated human resource services in China with a strong focus on recruitment related services. Offering a broad array of products and services, 51job connects millions of job seekers with employment opportunities and streamlines the recruitment process and human resource administration for tens of thousands of companies in China. Through print advertisements in 51job Weekly and online recruitment services at http://www.51job.com , both domestic Chinese employers and multinational companies alike are able to attract, identify and recruit new employees. 51job also provides executive search services and a number of other value-added human resource services, including training, business process outsourcing and salary surveys. 51job's nationwide office network in China spans 26 cities operating 23 local editions of 51job Weekly.
Use of Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (GAAP), 51job uses non-GAAP measures of adjusted income, adjusted earnings per common share and adjusted earnings per ADS, which are adjusted from results based on GAAP to exclude the impact of share-based compensation expense and foreign currency translation gain or loss. The Company believes excluding stock-based compensation expense from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company believes excluding foreign currency translation gain or loss from its non-GAAP financial measures is useful for its management and investors as such translation gain or loss is unrelated to the Company's core business operations and will not result in cash settlement nor impact the Company's cash earnings. 51job also believes these non-GAAP measures excluding share-based compensation expense and foreign currency translation gain or loss are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.
Safe Harbor Statement
Statements in this release regarding targets for the third quarter of 2007, future business and operating results constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations, and actual results could differ materially. Among the factors that could cause actual results to differ are the number of recruitment advertisements placed, sales orders received and customer contracts executed during the remaining weeks of the third quarter of 2007; any accounting adjustments that may occur during the quarterly close; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; behavioral and operational changes of customers in meeting their human resource needs as they respond to evolving social, economic and political changes in China as well as stock market volatilities; introduction by its competitors of new or enhanced products or services; price competition in the market for the various human resource services that the Company provides in China; acceptance of new products and services developed or introduced by the Company outside of the human resources industry and fluctuations in general economic conditions. For additional information on these and other factors that may affect the Company's financial results, please refer to the Company's filings with the Securities and Exchange Commission. 51job undertakes no obligation to update these targets prior to announcing final results for the third quarter of 2007 or as a result of new information, future events or otherwise.
- Financial tables to follow -
51job, Inc.
Consolidated Statements of Operations
For the Three Months Ended
June 30, 2006 June 30, 2007 June 30, 2007
(unaudited) (unaudited) (unaudited)
(In thousands, except share
data) RMB RMB USD (Note 1)
Revenues:
Print advertising 97,061 107,569 14,132
Online recruitment
services 55,059 71,203 9,354
Executive search 4,550 4,676 614
Other human resource
related revenues 16,693 26,497 3,481
Total revenues 173,363 209,945 27,581
Less: Business and related tax (9,375) (10,775) (1,416)
Net revenues 163,988 199,170 26,165
Cost of services (Note 2) (72,184) (84,076) (11,045)
Gross profit 91,804 115,094 15,120
Operating expenses:
Sales and marketing
(Note 3) (31,401) (42,232) (5,548)
General and administrative
(Note 4) (30,998) (29,804) (3,915)
Total operating expenses (62,399) (72,036) (9,463)
Income from operations 29,405 43,058 5,657
Loss from foreign currency
translation (1,258) (4,270) (561)
Interest and investment income 5,000 5,946 781
Other income 98 392 51
Income before provision for
income tax 33,245 45,126 5,928
Income tax expense (7,280) (14,095) (1,852)
Net income 25,965 31,031 4,076
Earnings per share:
Basic 0.47 0.55 0.07
Diluted 0.46 0.55 0.07
Earnings per ADS (Note 5):
Basic 0.94 1.10 0.14
Diluted 0.92 1.10 0.14
Weighted average number of
common shares
outstanding:
Basic 55,138,410 56,206,580 56,206,580
Diluted 56,450,619 56,613,893 56,613,893
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB7.6120 on June 29, 2007 in The City of New
York for cable transfers of RMB as certified for customs purposes by
the Federal Reserve Bank of New York.
2. Includes share-based compensation expense of RMB1,279 and RMB1,168
(US$153) for the three months ended June 30, 2006 and 2007,
respectively.
3. Includes share-based compensation expense of RMB1,100 and RMB1,005
(US$132) for the three months ended June 30, 2006 and 2007,
respectively.
4. Includes share-based compensation expense of RMB5,606 and RMB4,648
(US$611) for the three months ended June 30, 2006 and 2007,
respectively.
5. Each ADS represents two common shares.
51job, Inc.
Consolidated Statements of Operations
For the Six Months Ended
June 30, 2006 June 30, 2007 June 30, 2007
(unaudited) (unaudited) (unaudited)
(In thousands, except share
data) RMB RMB USD (Note 1)
Revenues:
Print advertising 203,716 221,126 29,050
Online recruitment
services 103,586 132,788 17,445
Executive search 9,600 8,528 1,120
Other human resource
related revenues 29,002 47,988 6,304
Total revenues 345,904 410,430 53,919
Less: Business and related
tax (19,099) (21,878) (2,874)
Net revenues 326,805 388,552 51,045
Cost of services (Note 2) (144,912) (168,926) (22,192)
Gross profit 181,893 219,626 28,853
Operating expenses:
Sales and marketing
(Note 3) (60,010) (76,008) (9,985)
General and
administrative (Note 4) (58,464) (58,719) (7,714)
Total operating expenses (118,474) (134,727) (17,699)
Income from operations 63,419 84,899 11,154
Loss from foreign currency
translation (2,871) (7,037) (924)
Interest and investment
income 9,549 11,396 1,497
Other income 34 370 49
Income before provision for
income tax 70,131 89,628 11,776
Income tax expense (17,665) (26,442) (3,474)
Net income 52,466 63,186 8,302
Earnings per share:
Basic 0.95 1.12 0.15
Diluted 0.93 1.12 0.15
Earnings per ADS (Note 5):
Basic 1.91 2.25 0.30
Diluted 1.86 2.23 0.29
Weighted average number of
common shares
outstanding:
Basic 55,031,824 56,175,178 56,175,178
Diluted 56,366,314 56,583,148 56,583,148
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB7.6120 on June 29, 2007 in The City of New
York for cable transfers of RMB as certified for customs purposes by
the Federal Reserve Bank of New York.
2. Includes share-based compensation expense of RMB2,226 and RMB2,352
(US$309) for the six months ended June 30, 2006 and 2007, respectively.
3. Includes share-based compensation expense of RMB1,914 and RMB2,022
(US$266) for the six months ended June 30, 2006 and 2007, respectively.
4. Includes share-based compensation expense of RMB9,756 and RMB9,835
(US$1,292) for the six months ended June 30, 2006 and 2007,
respectively.
5. Each ADS represents two common shares.
51job, Inc.
Reconciliation of GAAP and Non-GAAP Results
For the Three Months Ended
June 30, 2006 June 30, 2007 June 30, 2007
(unaudited) (unaudited) (unaudited)
(In thousands, except share
data) RMB RMB USD (Note 1)
GAAP income before provision
for income tax 33,245 45,126 5,928
Add back: Share-based
compensation expense 7,985 6,821 896
Add back: Loss from foreign
currency translation 1,258 4,270 561
Non-GAAP income before
provision for income tax 42,488 56,217 7,385
Non-GAAP income tax expense (7,274) (14,100) (1,852)
Non-GAAP adjusted income 35,214 42,117 5,533
Non-GAAP adjusted earnings per
share:
Basic 0.64 0.75 0.10
Diluted 0.62 0.74 0.10
Non-GAAP adjusted earnings per
ADS (Note 2):
Basic 1.28 1.50 0.20
Diluted 1.25 1.49 0.20
Weighted average number of
common shares
outstanding:
Basic 55,138,410 56,206,580 56,206,580
Diluted 56,450,619 56,613,893 56,613,893
For the Six Months Ended
June 30, 2006 June 30, 2007 June 30, 2007
(unaudited) (unaudited) (unaudited)
(In thousands, except share RMB RMB USD (Note 1)
data)
GAAP income before provision
for income tax 70,131 89,628 11,775
Add back: Share-based
compensation expense 13,896 14,209 1,867
Add back: Loss from foreign
currency translation 2,872 7,037 924
Non-GAAP income before
provision for income tax 86,899 110,874 14,566
Non-GAAP income tax expense (17,666) (26,449) (3,475)
Non-GAAP adjusted net income 69,233 84,425 11,091
Non-GAAP adjusted earnings per
share:
Basic 1.26 1.50 0.20
Diluted 1.23 1.49 0.20
Non-GAAP adjusted earnings per
ADS (Note 2):
Basic 2.52 3.01 0.40
Diluted 2.46 2.98 0.39
Weighted average number of
common shares outstanding:
Basic 55,031,824 56,175,178 56,175,178
Diluted 56,366,314 56,583,148 56,583,148
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB7.6120 on June 29, 2007 in The City of New
York for cable transfers of RMB as certified for customs purposes by
the Federal Reserve Bank of New York.
2. Each ADS represents two common shares.
51job, Inc.
Consolidated Balance Sheets
December 31, June 30, June 30,
2006 2007 2007
(In thousands, except share (audited) (unaudited) (unaudited)
data)
RMB RMB USD (Note 1)
ASSETS
Current assets:
Cash 868,698 959,152 126,005
Accounts receivable (net
of allowance of RMB2,612
and RMB4,121 as of December
31, 2006 and June 30, 2007,
respectively) 28,431 42,271 5,553
Prepayments and other
current assets 18,064 16,862 2,215
Deferred tax assets,
current 4,383 4,121 541
Total current assets 919,576 1,022,406 134,314
Property and equipment 194,315 195,177 25,641
Intangible assets 9,363 8,025 1,054
Other long-term assets 3,857 3,820 502
Deferred tax assets,
non-current 504 1,146 151
Total assets 1,127,615 1,230,574 161,662
LIABILITIES
Current liabilities:
Accounts payable 9,692 15,689 2,061
Due to related parties 464 219 29
Salary and employee
related accrual 26,677 20,377 2,677
Taxes payable 23,751 28,285 3,716
Advance from customers 57,930 76,887 10,101
Other payables and
accruals 20,561 21,135 2,777
Total current liabilities 139,075 162,592 21,361
Deferred tax liabilities,
non-current 122 246 31
Total liabilities 139,197 162,838 21,392
Commitments and contingencies
Shareholders' equity:
Common shares (US$0.0001
par value; 500,000,000 shares
authorized, 56,119,761 and
56,282,125 shares issued
and outstanding as of
December 31, 2006 and June
30, 2007, respectively) 46 47 6
Additional paid-in
capital 859,899 875,857 115,063
Statutory reserves 4,849 4,849 637
Other comprehensive gain 261 434 57
Retained earnings 123,363 186,549 24,507
Total shareholders' equity 988,418 1,067,736 140,270
Total liabilities and
shareholders' equity 1,127,615 1,230,574 161,662
Note 1: The conversion of RMB amounts into USD amounts is based on the
noon buying rate of USD1.00=RMB7.6120 on June 29, 2007 in The
City of New York for cable transfers of RMB as certified for
customs purposes by the Federal Reserve Bank of New York.
For more information, please contact:
Linda Chien
Investor Relations
51job, Inc.
Tel: +86-21-6879-6250
Email: investor.relations@51job.com
